Let Your Tenants Send Your Kids to College

Let Your Tenants Send Your Kids to College

Is College Paid For Already?

Most people have lots of things to save for but not enough money left at the end of the month.

A relatively small investment can buy a good home that will easily rent, generate positive cash flow and pay for itself. The borrowed funds create leverage that earn a return on the total value of the home and not just the amount of cash you have invested.

Choose the Right Property

The strategy is simple. Find a slightly below-average priced home that will rent well. It will appeal to a larger group of people while it’s rented and when it’s ready to be sold.

Rent the home and maintain its condition over the years. As the loan amortizes and the value increases, the equity will grow. When your child is ready to start college, you’ll actually multiple options:

Sell the property; pay the tax on the gain at the reduced capital gains rate and fund the education.

Refinance and take the proceeds to pay for the tuition. This would allow you to continue to own the asset but would free your equity and, under current tax laws, is a non-taxable event.